The rise of ebooks and the consequent fall of paperbacks

Julie Bosman had an interesting article yesterday on the New York Times on the falling sales of paperbacks, which is actually more on the rise of ebooks and the consequent fall of paperbacks.

She writes there:

"A comprehensive survey released last month by the Association of American Publishers and the Book Industry Study Group revealed that while the publishing industry had expanded over all, publishers’ mass-market paperback sales had fallen 14 percent since 2008."

Why? David Gernert, a literary agent whose clients include John Grisham, a perennial best seller in mass market, explains on the article that “e-books have bitten a big chunk out of it”and Matthew Shear, the executive vice president and publisher of St. Martin’s Press adds “in some ways, the e-book is yesterday’s mass market.”

Is it a bad or good trend? I actually think this is the wrong question. Even if e-books are not responsible for 100 percent of the fall of he paperback sales, I guess their rise as a convenient and cheap alternative makes paperback books a less valuable option and therefore a product less people want to purchase.

Although some people in the book industry, like Michael Connelly, the best-selling mystery writer best known for “The Lincoln Lawyer,” are worried of this trend and afraid that "book buyers would not be able to discover new authors very easily if mass-market paperbacks continued to be phased out," I think they'll find out that the electronic format, coupled with more online presence of authors and publishers, actually has the potential to increase the exposure of book buyers to new authors and not reduce it.

So what would you read this Labor Day - would it be a paperback or an ebook? Or maybe both? Feel free to share your choice with us.

Image credit: umpcportal, Flickr Creative Commons

Yours,
Raz @ Eco-Libris

Eco-Libris: Plant trees for your books!

My article on Triple Pundit on the latest raid on Gibson Guitars

Here's an update on a new article I published today on Triple Pundit on lat week's raid on Gibson Guitars, the second one in two years, following suspicions the company violated the Lacey Act.

The article is entitled "Is Gibson Guitars Unfairly Bullied or Have They Really Screwed Up… Again?". Here's the first paragraph of the article:

Last week, for the second time in two years, federal agents raided the facilities of Gibson Guitars, probably the most well-known guitar maker around the world. Although the two raids are the result of different cases, the accusations then and now are similar – violations of the Lacey Act, a law requiring that all wood products and plants imported into the U.S. come from legal sources.

To read the full article go to http://www.triplepundit.com/2011/08/gibson-guitars-wood-lacey-act/

Links to other articles I wrote for Triple Pundit can be found at http://www.triplepundit.com/author/raz-godelnik/

Image credit: jacksonpe, Flickr Creative Commons

Yours,
Raz @ Eco-Libris

Eco-Libris: Plant trees for your books!

Five signs Barnes and Noble is heading for bankruptcy following its latest quarterly report

Barnes & Noble released today its results for the last quarter, ending July 30, 2011. Although B&N's price went up almost 15% following the release of the quarterly report, I see in this report many signs that worry me, as they indicate the company is on its way to bankruptcy, just like Borders.

Here are the most prominent signs:

1. B&N doesn't have a strategy to transform its brick and mortar bookstores from a liability back into an asset and as a result sales continue to decline - "Revenue in stores open at least one year, a key indicator of a retailer's health, fell 1.6% at regular stores and 1.8% at college bookstores." (Reuters).

2. The Nook itself won't save the company - "Sales of the Nook group of devices, which includes a standalone as well as a touch-screen reader, rose 140 percent to $277 million in the quarter..Barnes & Noble Inc forecast sales of its Nook e-reader and e-books would more than double this fiscal year to $1.8 billion".

According to Reuters, "if the Nook and the e-books sales it generates live up to Barnes & Noble's expectations, they would account for a quarter of the chain's sales and all of its growth." Not only that putting all the bets only on the Nook is a risky move, but even if it will succeed the company still have 75% of business in trouble. The Nook itself just won't save the company, no matter how well it will perform.

3. B&N seems to think only about the short term, ignoring the long-term - "Barnes & Noble says it expects to get a lift in sales of $150 million to $200 million after Borders, which declared bankruptcy in February and said it would liquidate in July, completes liquidation sales and closes."We're convinced this holiday will be the biggest traffic we've had in the stores over five years," Lynch said in a call with analysts." (USATODAY.com) - What will happen after this holiday season and after some Borders' customers will switch to B&N? Lynch has no answer.

4. The stores become a burden on BN.com - "revenue from the website rose 37%, driven by sales of Barnes & Noble's Nook Color and Nook Simple Touch Reader, and digital content." (USATODAY.com). The success of BN.com only demonstrates the weakness of B&N's brick and mortrar stores, which are still the core business of B&N.

5. When toys are your best idea to promote sales in stores you're in trouble - "While traditional physical book sales declined during the quarter, the stores posted large increases in sales of the NOOK product line and Toys & Games." Yet, the stores to remind you are still losing, which means that increasing toys sales do not compensate for declining books sales in the stores. Next idea, please.

And finally, did I mention that there is no buyer to the company? If the picture is so rosy as CEO Lynch presents it, how come no one wants to buy the company and enjoy the fruits of the we-invest-only-in-the-Nook strategy? Maybe it's not as brilliant strategy as B&N wants us to believe?

You can check our updates on Barnes and Noble Bankruptcy Index on our website.

You can also find more resources on the future of bookstores on our website at www.ecolibris.net/bookstores_future.asp

Yours,
Raz @ Eco-Libris

Eco-Libris: Plant a tree for every book you buy!

How do we know that paper books and newspapers are losing market share to tablets?

Yesterday I read on Environmental Leader that "By 2015 paper use in North American magazines, newspapers and books is expected to fall between 12 and 20 percent from 2010 levels, as the use of tablet devices and e-readers rises, according to a report by paper industry information source RISI."

The report, "The Impact of Media Tablets on Publication Paper Markets" sounds very interesting but if you want to read it you'll need to pay $5,900. Now, if you a free of charge evidence, a bit less scientific maybe, but still very convincing that paper is loosing its hegemony to electronic formats, all you need to do is to check a new survey published by Staples.

The survey, as CNN reported, asked 200 tablet-using professionals about their preferences and habits. There were several interesting findings, but one of them sticks out:

"More than one-in-three respondents -35% - fessed up to using their iPad, Motorola Xoom, Samsung Galaxy or other tablets while in the bathroom."

That's it, ladies and gentlemen. Game over. If books, newspaper and magazines lost 35% market share at the bathroom, it's just a matter of time until paper reading will lose the rest of the battle, becoming eventually only a niche market for paper lovers and those who can't still go to the bathroom without a piece of paper or a good book.

Image credit: dalboz17, Flickr Creative Commons

Yours,
Raz @ Eco-Libris

Eco-Libris: Plant trees for your books!

My article on Triple Pundit on Bibliotaxi, a new book-sharing service in Brazilian taxis

Here's an update on a new article I published on Triple Pundit on Bibliotaxi, a new service that is looking to transform taxis in Sao Paulo, Brazil into both libraries and community connection points.

The article is entitled "Bibliotaxi Transforms Cabs into Local Libraries". Here's the first paragraph of the article:

On a survey published earlier this year by NYC Taxi and Limousine Commission, 31.3% of the respondents picked the Taxi TV as the worst thing about cab riding today. Although so many New Yorkers hate these TV sets, the commission’s reply is actually adding another channel with more shopping and cooking shows. Maybe the commission should learn from a taxi service in a neighborhood in Sao Paulo, Brazil that thought there might be a better alternative to provide cab riders with: Books.

To read the full article go to http://www.triplepundit.com/2011/08/bibliotaxi-brazilian-cab-riders-good-book-connect-community/

Links to other articles I wrote for Triple Pundit can be found at http://www.triplepundit.com/author/raz-godelnik/

Image credit: Bibliotaxi

Yours,
Raz @ Eco-Libris

Eco-Libris: Plant trees for your books!

Why John Malone does not want to buy Barnes and Noble?

Bloomberg reported yesterday that "Liberty Media Corp., controlled by billionaire John Malone, invested $204 million in Barnes & Noble Inc. (BKS) after dropping its offer to acquire the largest U.S. bookstore chain"

So why did Malone decide not to buy B&N and purchase only 17 percent of the company's stock (at $17 a share)? Here are few possible answers:

1. He finally understood that B&N has become a risky business operating in a volatile environment.

2. He understands that B&N is still mostly a brick and mortar retailer and as such is very vulnerable to the changes in the book industry, from the rise of e-books to increasing competition from discount retailers such as Wal-Mart (Just a reminder: Comparable store sales at its consumer bookstores fell last quarter 2.9% amid a decline in trade books).

3. He knows that B&N has no winning strategy on how to transform its 700+ stores from a liability into an asset. Apparently he doesn't know it either.

4. He learned the lessons from Borders' bankruptcy and liquidation.

5. All replies are correct.

So why does Malone invest $200 million at B&N? I guess he believes this way he is limiting his risks this way and gives himself a ticket to the world of digital reading, tablets and other future gadgets that will take control of our life in the near future.

On Bloomberg, Bill Kavaler, a New York-based analyst at Oscar Gruss & Son Inc., is quoted saying:

“John Malone likes to buy low-cost calls on interesting potential and ideas and Barnes & Noble is interesting as the only national book chain that’s standing,” Kavaler said. “For $200 million, he’s got a shot at seeing what happens.”

Well, I am not sure if this $200 investment is a cheap bargain. We'll have to see about it. As of today, Friday's stock price of $9.98 results in a $80 million paper loss for Malone.

In any event, there's no doubt this is still a very risky investment - not only because of the stores, but also because on the digital side of the business B&N competes with companies that are more technological oriented and have deeper pockets, such as Amazon and Apple.

We hope Malone won't regret it. We'll keep updating you on it.

You can check our updates on Barnes and Noble Bankruptcy Index on our website.

You can also find more resources on the future of bookstores on our website at www.ecolibris.net/bookstores_future.asp

Yours,
Raz @ Eco-Libris

Eco-Libris: Plant a tree for every book you buy!

Amazon is moving forward to become a publisher - Is it good or bad for publishers and readers?

The New York Times has a story today on the growing efforts of Amazon to publish books. Amazon is for a long time much more than a book seller, but apparently its efforts to establish itself as a publisher are getting many publishers and other players in the book industry worried. Amazon, they fear is becoming too big and too strong and will be able soon to take bigger and bigger bites out of the market.

According to the article Amazon publishing books is not news as it has been publishing books for several years. Its efforts went up several notches in visibility when it brought in the longtime New York editor and agent Laurence Kirshbaum three months ago as head of Amazon Publishing, but this is not the news either. The news is that Amazon announced yesterday that Amazon Publishing's made its first major acquisition - it has signed Timothy Ferriss, the wildly popular self-help guru for young men.

Ferriss, the press release added is author of the #1 New York Times best sellers "The 4-Hour Body" and "The 4-Hour Workweek". He will publish with Amazon Publishing the next book in his "4-hour" series, "The 4-Hour Chef."

Ferriss explained that "My decision to collaborate with Amazon Publishing wasn't just a question of which publisher to work with," said Tim Ferriss. "It was a question of what future of publishing I want to embrace. My readers are migrating irreversibly into digital, and it made perfect sense to work with Amazon to try and redefine what is possible. This is a chance to really show what the future of books looks like, and to deliver a beautiful experience to my readers, who always come first. I could not be more excited about what we're doing."

On the NYT article Ferriss added two interesting observations:

"Amazon has a one-to-one relationship with every one of their customers. You can just imagine the possibilities that opens up.”

and

“The opportunity to partner with a technology company that is embracing publishing is very different than partnering with a publisher embracing technology."

Basically, Ferriss is saying that Amazon is better geared to be a publisher in the digital age than other publishers, providing readers a better reading experience and authors with better chances to sell more books. Is it true? It's not clear yet, but Amazon's technological capabilities and customer engagement experience give them a substantial advantage in the age of multi-reading platforms.

Should publishers be worried? Yes and No. Yes, because Amazon can create value for authors publishers can't and authors know it. No, because publishers also have added value and experience and if they will know to adjust themselves to the new technological demands of the market and readers they can still give Amazon a good fight.

Bottom line: Although this step might make publishers' life more difficult, it has the potential to move everyone forward and eventually readers will only benefit from it, as they will have more options and enjoy an enhanced reading experience.

Yours,
Raz @ Eco-Libris

Eco-Libris: Plant trees for your books!